Talking Point

Will West Ham close the gap on Spurs?

The owners have frequently talked about ambition for West Ham to become a top six side in the future and that starts with closing the gap on Spurs they claim.

In terms of financial power, West Ham lags behind their North London rivals. Tottenham published their accounts for 2016 last month showing an increase in turnover to just under £210m to compared to the Hammers £142m for the same period last season.

Spurs Premier League gate receipts were £22.2m. Like the Hammers White Hart Lane sold out for all Premier League home games but they claim to have a waiting list for season tickets of 63,200 compared to our 55,000 waiting list. They reached the round of 16 of the UEFA Europa League resulting in gate receipts and prize money of £18.7m. Revenue from the domestic cup competitions earned the Club £2.4m. Television and media revenues rose to £94.8m after they finished third in the Premier League.

In reality, their income will continue to outstrip West Ham’s as the Champions League mega money comes through this season and they look odds on favourite’s to qualify again this season and continue on that money trail.

Next season they will play at Wembley and could see regular attendances of over 80,000. In February this year, they had an attendance of 80,465 that watched Tottenham v Gent which is a new UEFA Europa League attendance record, beating the previous high set when Manchester United met Liverpool last season. They have applied to Brent Council to hold Premier League games at the full 90,000 capacity for the next two seasons.

Their new 61,000 capacity £800million stadium should be ready ahead of the 2018-19 season. Although they will need to fund it for many years, it has been purpose built for football, they own it and will, therefore, sell the naming rights for as much as £20m per year and they keep all the catering and pouring income.

Although technically West Ham will one day have the ability to claim a 66,000 capacity rented stadium, the when is less clear due to a requirement for planning permission for extra toilet and catering to cope with 9,000 additional match day fans. The stadium owners and the club are currently at a stalemate over money at the moment and any increase from 57,000 is debatable for next season as it stands. Spurs also plan to sign up an American football franchise for their new stadium.

On the pitch is probably the biggest gap. Despite Spurs being the sixth biggest turnover in the Premier League, they have outperformed their financial might on the pitch last season and again this season.

They have 71 points and are in second place just four points behind league leaders Chelsea while West Ham settles for 13th position on 37 points.

Their chairman rarely talks to the media, is not on twitter and never makes promises or statements he can not realistically deliver. We may not like Levy but it hard not to admire his business acumen and transfer dealings.

They have invested wisely and bought and developed youngsters. Eastender Harry Kane was a youth product of their academy and they signed a young Delli Alli for £5m from MK Dons in 2015 to name just a few.

Pochettino is a well-respected manager. He has a squad of players that routinely outclass their opposition in terms of distance covered on the pitch. With training sessions allegedly higher in intensity than matches and a rigorous preseason training regime, Pochettino ensures that even if his team lose, it would not be due to a lack of effort.His team rarely lose, especially at home. They have an impeccable defence and has conceded the fewest goals in the league.

The core of the Spurs side is refreshingly young with Harry Kane at 23, Dele Alli at 21 and Christian Eriksen at 24, among others. The Argentinian manager seems comfortable to integrate a steady inflow of talent from the youth academy, there is no other manager who would be quite as prepared to risk his reputation for giving youth a chance.

On the flip side, it is true that we have the largest TV screen in Europe at the London Stadium but this is the only thing we could claim to have the upper hand over them over the foreseeable future. It pains me to write all of this and embarrassing that our club boasts the largest TV screen in Europe as a positive.

However, we have closed the gap on the physical distance between the two clubs, West Ham is only 4.5 miles away from White Hart Lane compared to 6.4 miles away from the Boleyn ground. By road, the shortest route is 5.8 miles along the A10 while it would be 10.5 miles by road from the Boleyn ground.

In reality beyond TV screens and physical distance, we will not be catching Spurs anytime soon and not be joining the top six anytime soon either. It is time we just accept that and move on.

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Talking Point

The price of reaching the Champions League

The Daily Express ran a claimed Exclusive on Monday night claiming there was a renewed attempt by Sullivan and Gold to actively look for people with the wealth to take the club to the next stage. The report said that the two Hammers supremos have been looking to bring other investors into the club for over a year but plans had been put on hold this season while Slaven Bilic’s team dropped towards the Premier League relegation zone. They stated that Sullivan and Gold want to recoup some of their investment in the club, but both will want to keep their places on the board in the future if any deal is done. Last summer the duo rejected a reported £650million takeover bid for the club from energy drinks giants, Red Bull, although a bid was later denied by the firm. A valuation of the club last year put a price on West Ham of around £200m, although Sullivan believed the move to the London Stadium meant the club was worth nearer £400m.

For me this report was old news, Sullivan and Gold have been openly looking for wealthy West Ham fans to invest in the club since 2010 while retaining the majority of shares in the Hammers. Terry Brown and the Harris Family invested £4m in return for 3.8% of the shares in 2010 but there has been no serious interest since to share the financial burden of investing in the club.

What did surprise me what the knee jerk reaction on the official website yesterday disclaiming the ‘fake news’

Speaking to the official website Sullivan said: “It is no secret that both David Gold and I see our long-term futures as custodians of West Ham United.

“We have never once viewed West Ham United as a short term project and plan to be here for many, many years, bringing further progress to the Club on and off the pitch, and success to our loyal supporters. It disappoints me to see an article published that is so utterly false.”

The Statement got me to look back what was previously said by the owners on the subject:

In January 2010 Sullivan set out his stall on the day of takeover by saying “We have a seven-year plan to get them into the Champions League and turn them into a big club and over the seven-year period we do plan to spend a lot of money, The short-term plan is all about survival and getting behind the team. It is also about getting behind the manager.”

Gold told in the Daily Mirror in 2012: "You have to be a billionaire to make a major difference and there aren’t many of them about. Of course, I’d welcome a Father Christmas. But then you look and discover that it might not be the real Father Christmas. And you know why? Because there isn’t a real Father Christmas. He doesn’t exist.

“In an ideal world, though, if you ask what I’d like to see happen, I would like a very wealthy person to come and join us.David and myself are wealthy by normal standards, but not by football standards.We would be reluctant to sell the whole football club because we feel part of it. It’s taken us a lifetime to earn enough money to return to our roots and we won’t give that up lightly. We’re doing our best but it would be that much easier if there were three of us.”

Gold added: “We’re not going to be a top-four club straightaway. But one day it’s possible, if there is a super-wealthy West Ham fan who wants to come and join the club, that could change things for us. Now we have to do the best we can within the areas of our ability.To grow the club, fingers crossed to get to the Olympic Stadium would change our whole image, would help us attract better players. But it all boils down to income and we have to generate more income.”

In December 2014 Sullivan said: “I’d love someone to come in and buy 20 percent & the money would not go to us, it would go to the club.”

In 2015 Sullivan told the Sunday Times “Long-term, there’s no reason we can’t be one of England’s leading six clubs, pushing for the Champions League. You have to dream. Otherwise what’s the point of being an owner or supporter? And we are both owners and supporters. We have no desire to sell West Ham. We hope to pass it to our kids and grandkids. While the deal is confidential if we sell before 10 years most of the money would go to the government. We’re not here for a quick buck.”

At the end of last year, the message from Sullivan was: “I want to reiterate that we, the current owners, have no desire to sell the club unless it is to somebody like the King of Saudi Arabia who can take it to a level we cannot ourselves hope to reach.”

In the Sunday Times Rich List of 2016 David Sullivan was valued at a net worth of £1 billion of which £200m was his share of West Ham. Most of his wealth is tied up in properties but he owns the Sunday Sport, race horses and retains businesses involved in publishing, sex shops, material aids and phone lines. David Gold is claimed to be worth £300m. His 35% of West Ham is valued around £140m while the remainder of his net worth is related to Gold International Group which owns Ann Summers and Knickerbox but also owns Gold Aviation and various property investments. It has a turnover £112m but the profit under £1m per annum.

Karren Brady has a net worth £85m but is not listed as a current share owner of West Ham despite her claiming in interviews she has some shares.

Terry Brown made £33.4m when he sold his West Ham shares but has probably increased his net worth since selling out to the Icelandic’s.

The Harris family are thought to be worth around £150m after their sale of the Alba electronics firm.

The chances of a Middle East billionaire buying the Hammers seem remote despite rumours of the Qatar Investment Authority wanting a premier League outfit.

Here is my suggestion for what it is worth, Gold and Sullivan could sell 35.2% of their shares for £140m valuing the club at £400m. The Icelandic’s could also sell their remaining 10% for £40m. Gold and Sullivan could use £40m to repay the majority of the shareholder then re-invest £100m into the club. The new wealthy investor could invest £96m in cash with Brown/Harris Family throwing in another £4m.

West Ham would be debt free with £200m war chest and Gold and Sullivan would retain overall control with 51% of the shares.

The challenge comes finding a wealthy individual prepared to part with £276m in cash!


Talking Point

A plea to fill those empty seats in the London Stadium

The next two home games at the London Stadium have already sold out meaning that season ticket holders who can’t make the Swansea or Everton games can relist their seats on Ticket exchange or share them using the new Ticket Forwarding function.

Thousands of seats remain empty each league game depriving thousands of Hammers the chance to watch their club.

The real number supporters recorded through the electronic turnstiles for the West Ham v Stoke City game last November was 48,391 compared with 56,970 tickets sold and published as the official attendance. The number supporters recorded through the electronic turnstiles in the West Ham v Arsenal game in December last year was 51,122 compared with 56,980 tickets sold and published as the official attendance.

A Club spokesman told me at the time “In line with other Premier League clubs, the attendance figure we announce at home matches reflects the number of tickets sold. We understand that there are always a number of Season Ticket Holders who are unable to attend specific matches for various reasons and we are working hard to ensure we fill as many empty seats as possible via our Ticket Exchange facility. West Ham United encourage all Season Ticket Holders who are unable to attend matches to offer their tickets for resale on the Ticket Exchange, enabling their fellow supporters who wish to purchase tickets for matches to be able to do so.”

Both upcoming home games are category B and season ticket holders will get 90% of their ticket face value back for either game you can’t make. The remaining 10% goes to Ticket Master as an admin fee to fund the scheme. Any profits the club make reselling your ticket at general admission price goes back to the transfer budget.

Full details of the Exchange functionality, how much credit you will get and how to use it can be found at http://www.whufc.com/ticketexchange

Also now available is the new Ticket Forwarding function which allows you to forward your season ticket on to friends, family or strangers free of charge or you can even donate it to Charity to allow those less fortunate to enjoy a West Ham in your seat. The receiving supporter just pays a £1.25 booking fee to print off the ticket at home.

Full instructions on how to forward your ticket to someone else can be found HERE

Both Chelsea and Leicester City visiting supporters have sung about our empty seats despite each game being a sellout with every single ticket sold. Let’s not give Swansea on 8th April and Everton on 22nd April the opportunity to do the same.

In my view this is not down the club, the board, the manager or the players, this is down to the season ticket holders to make it happen, it is our own control to fill every season ticket seat at the London Stadium and we have only got ourselves to blame if we don’t!

Ticket exchange is already open and available for the Swansea and Everton home games with ticket forwarding available ten days before each game.

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Financial

Whatever happened to Financial Fair Play?

We hear very little about Financial Fair Play these days from the West Ham board for one very good reason.

Clubs have now been allowed to increased their wage bills by £7m per season – up £4m on the previous three-year scheme.

Last year Premier League clubs quietly voted to continue the self-governing Premier League FFP scheme which will run for a further three years including this season.

The Hammers published a total wage bill of £84.7m in their 2016 accounts for last season but this includes non-playing staff which aren’t included in the FFP cap. That was an increase of £12m on the 2015 wage bill of £72.7m which saw a £9m increase from 2014 when the wage bill was £63.8m

A financial source close to the club told us:

“For 2016-2017, we elected (along with the most other clubs) to take our actual (player wage) spend from 2015-2016 and add our annual allowance of £7.0m plus our Club Own Revenue Uplift (CORU) to give us the maximum amount we can spend on players plus NI. We remain well within this cap and will comply with the STCC rules. We did not go back to the 2013 base year as it was not in our interest to do so as we have generated CORU each year and if we went back to the base year it would limit our spend.”

“For next season, 2107-2018, we will again elect to take our actual (player wage) spend in 2016-2017, and add £7.0m, plus CORU, to give us our maximum spend. We will comply with the STCC limits as we have for the last four years.

“For 2018-2019, we will take our actual spend in 2017-2018, and add £7.0m plus CORU to give us our maximum spend.”

“Rest assured, we know our obligations and we know that the Premier League looks at this closely, and we would never risk breaking the rules.”

“We have complied every year and will continue to do so. Suffice to say we operate within the rules and have sufficient headroom when required.”

A source close to club said on FFP:

“Suffice to say we operate within the rules and have sufficient headroom when required”


Talking Point

The £140,000 London Stadium investigation

At the end of February, the Mayor of London quietly announced that accountancy firm Moore Stephens had been appointed to write a £140,000 report about the mistakes made in the London Stadium transformation and what lessons could be learnt.

The purpose of the investigation is listed by the Mayor’s office as:

• To provide a narrative explanation of the history of the London Stadium, including all relevant construction, financial and operational arrangements, with a particular focus on the stadium’s conversion into a multi-use arena and the subsequent negotiations and arrangements

• To confirm the key decision points and contractual commitments made, including the financial and operational projections that informed the significant investment of public money into transformation works and who was responsible for them

• To assess whether the work leading to the decisions and commitments made was sufficiently robust and subject to appropriate levels of due diligence and negotiation to ensure that value for money was achieved for the taxpayer after taking into account the legacy objectives and expected benefits

• To report on the stadium’s financial viability in terms of an assessment of the ongoing and future operating costs and income of the current working arrangements

• To identify any lessons that can be learnt

• To work with all relevant organisations to obtain evidence for this work, reporting any lack of co-operation to the Mayor’s office

• To produce a report for publication.

The investigation and its resulting report will cover three distinct phases in the genesis and life of the Stadium:

1. The Olympic bodies’ original decision making in determining the design and nature of the Stadium built for the Games and what thought was given to how the Stadium would be used post-Games

2. The decision making of LLDC and its forebears in the tendering for and delivery of the Stadium transformation in light of the original design and its legacy objectives

3. Decisions pertaining to the current operational arrangement for the Stadium, including those made by LLDC, LB Newham and E20 Stadium LLP, and those taken by Her Majesty’s Government and the GLA such as hosting the 2015 Rugby World Cup and the 2017 World Athletics.

Moore Stephen’s project plan is for a draft report to be presented to the GLA in June 2017. The report will then be finalised and a public report made available to the public later in the summer.

Whether £140,000 is a good use of taxpayers money to tell us what we already know is a valid question but Moore Stephens seems an odd choice as they have been regular auditors for the LLDC and were involved in the stadium transformation itself.

In 2013 they audited the LLDC for change control, project management and business cases in relation to the Queen Elizabeth Olympic Park and these reports are still in the public domain. In 2015 they were involved with the Mayor’s office to audit the London Stadium transformation project. They gave a green light to the project in
April 2015 in another public document which is still online.

It all seems rather strange but then again it is politics at the heart of this investigation.

The Stadium operators budget and business case has been shot to pieces, they under estimated the number of stewards, the cost of policing and extra security costs. The lack of a Stadium naming rights partner for the first season has cost them big also. Budget projections from the LLDC suggest they will lose £8.4m in operating costs in the stadium 2017/2018 with a loss of £5.4m in operating costs in 2018/2019. They are predicted to lose £35m this year.

Gone are the days of a business plan which suggested a £250,000 profit each year to the taxpayer. At the time there was an outcry it was only £250,000!

As a side note, the stadium owners are thought to be on the brink of announcing paying London Living Wage for all sub contractors working the London stadium which increase running costs yet again by at least another £250,000 per year.

We shall wait and see the outcome of the report but I could have saved them the money as I can almost guarantee what the report will say.


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